Is there any point overpaying tax free childcare

[OnePerkyFish]

Single mum and will have my childcare fees reduced in September, to the extent that I will have a surplus in my tax free account if I continue to put in £2k a quarter to get the government top up of £500.

I understand that I can only use this money for childcare and that the top up will be refunded if I withdraw money.

Is there any point overpaying? Could it maybe be used for summer/out of school childcare? How much is that usually? Do they all accept TFC? My sister in law said her child don't get it at 6 and 9.

You can use for childcare such as wraparound care and holiday clubs until your child is 11. Your sister in law is wrong. The challenge is finding holiday clubs that have registered for the scheme, most of the holiday club programmes near us have but clubs like dance and sports haven’t. DDs art club can use for her after school classes.

Yes...you can use it for summer holiday kids clubs

She uses breakfast and after school
Yeah I should bring it up. Maybe they don't accept if

Yes but is there any point overpaying.

You can use it for anything Ofsted registered. I currently use it for Stagecoach and after school club. In the past I've used it for various holiday clubs and other extra curricular activities.

There's no downside to overpaying, you can withdraw your money back out again at any time and it's back in your account in a couple of days. I try and pay in the same amount each month so that come the summer holidays I've got a balance ready to use.

Your SIL won't get it if either of them earn over £100k.

Both parents (if together) have to be working and earn over the threshold but not more than £100k. But lots of people don’t know about it

In terms of overpaying, only if it benefits you to have some saved up since you’ll be able to claim it for a good few years more.

So are clubs going to be more than £200 a week? If not, no point paying in

Depends where you live and the clubs you do, they could be anywhere from £100 to £400. It's an incredibly specific question to pose with zero detail.

Not until you are sure you will be able to use it as intended.

I did with vouchers and covid happened and they were worthless. After covid the requirements changed and loads of providers withdrew. We struggled to spend them or get a refund. This may be specific to vouchers and Welsh requirements though.

If you overpay then you've effectively pre-saved what you might need for after school care and holiday clubs so you don't need to worry about it later. And you can take your money back anytime so no harm done if you end up not able to use the account for holiday clubs etc.

If you overpay and don't use it you can get it back, minus the tax free top up obviously

I’m overpaying. At the moment I’m enjoying 2 months of not paying nursery payments before DS starts school. The idea is I’ll get to a point where I’ll have enough surplus that I don’t have to budget to pay into tfc. When he gets to the point where he doesn’t need holiday clubs I’ll just withdraw whatever is left over.

Yes it's worth overpaying. Worst case scenario you just withdraw the moment and you've lost nothing (you just don't get the top up, obviously) but if your costs increase or if you are unable to put in as much at a later date for some reason, then you'll already have the buffer there, compete with maximum top up.

We only stopped maxing out the account when youngest was about 6, because we use much less childcare now.

We built up a big buffer of childcare vouchers over COVID. Our wrap around and holiday club take them and it's been great knowing that we have the vouchers to cover holiday childcare. But not everywhere locally takes them. The tax free childcare is more widespread especially as less and less people now get vouchers